Overturning the Austin Court of Appeals, the Texas Supreme Court ruled unanimously Friday that a Connecticut insulation company claiming no discernible connection to Texas could be sued in Texas.
They did so, in part, via The Wayback Machine.
The company, SprayFoamPolymers.com, sought to avoid a products liability and deceptive trade practices lawsuit brought in Travis County by a couple claiming that the company’s foamed attic insulation, Thermoseal 500, turned out to be a noxious health risk.
In July 2013, Frank and Helene Luciano hired Old World Cast Stone to insulate the attic and roof deck of their newly built home. The couple said that when they moved in, they were soon overwhelmed with coughing spells, itchy and burning eyes, as well as headaches they attributed to the insulation. For months they were told both by Old Word and SprayFoam that the problems would dissipate. But when they didn’t, the Lucianos sued Old World and SprayFoam.
In special appearance, SprayFoam argued that as a Connecticut company a Texas trial court should have no personal jurisdiction over a claim against them. SprayFoam claimed that it not only had no purposeful business in Texas, but that it had purposely avoided doing business in the Lone Star State; it neither sold nor advertised any of its products in Texas; had no control over the salesman who had provided their product to Old World; and that SprayFoam had contracted with a third party based in Colorado to outsource whatever business might happen to occur in Texas.
However, the Lucianos countered that on his LinkedIn page the salesman, Preston Nix, described himself as the “Southwest Sales Manager” for SprayFoam; that Old Word’s website touts their use of Thermoseal 500; and that screenshots of SprayFoam’s own website — archived on The Wayback Machine website — boasted of a “Grand Prairie, TX Distribution Center” for storage of its temperature-sensitive products.
The trial court rejected SprayFoam’s authentication, as well as their special appearance. But that decision was overturned by the Third Court of Appeals, which dismissed SprayFoam from the litigation, concluding that the Lucianos had not shown that SprayFoam established sufficient minimum contacts with Texas to be subject to their suit. What was needed, they concluded, was more specific evidence that the Lucianos had relied on any of those relationships in contracting for the use of SprayFoam’s product.
In its opinion, written by Justice John Devine, the Supreme Court said that SprayFoam’s relationship to Connecticut — where it was formed, processes its orders and receives payment — did not preclude its “purposeful availment” to do business in Texas.
Moreover, by ignoring the Luciano claims — the distribution center, the relationship to Nix and routine sales to Texas installers like Old Word —the Third Court had erroneously narrowed the standard for jurisdiction.
“Notwithstanding the contacts SprayFoam claims to have with Connecticut, its conduct in Texas resulted not in a mere dribble, but in a stream of activity that allowed it to enjoy the benefits of doing business in this state.”
“Placing its product into the stream of commerce in conjunction with its ‘additional conduct’ of soliciting business and distributing its product in Texas is sufficient to hold that SprayFoam purposefully availed itself of the Texas market.”
Dawn Smith of Smith Cline Smith represented the Lucianos. Tab Keener of Downs & Stanford represented SprayFoam.
The case is Frank Luciano and Helene Luciano v. SprayFoamPolymers.com, No. 18-0350.